NEW YORK, NY.- A state-owned bank in Bavaria announced on Monday that it would return a masterpiece by Wassily Kandinsky that has hung in a German museum since 1972 to the descendants of a Jewish family that suffered persecution during the Nazi occupation of the Netherlands.

The bank, BayernLB, said in a brief statement that it had decided to follow a recommendation issued last month by the German government’s advisory panel on Nazi-looted art. The panel advised the bank to restitute the 1907 tempera painting, “Colorful Life,” to the heirs of Emanuel Albert Lewenstein, the director of a sewing machine factory, and his wife, Hedwig Lewenstein Weyermann.

“Every restitution is important to the families of persecuted victims as it provides them with a sense of healing, justice and dignity,” said James Palmer, who represents the heirs.

The Lewensteins owned an extensive art collection, a large part of which was sold at an auction in Amsterdam on Oct. 9, 1940, just months after Germany invaded the Netherlands. BayernLB acquired “Colorful Life” from the widow of the collector who had bought it at that auction.

The bank had lent the painting, a vibrant, dreamlike scene that depicts an array of brightly dressed Russian characters in a fantasy landscape, to a Munich museum, the Städtische Galerie im Lenbachhaus, for the past 50 years. Kandinsky lived in Munich for much of his early career and the museum has one of the most important collections of his art worldwide.

Years of research into the provenance of “Colorful Life” failed to uncover the circumstances of the 1940 sale, or even who had put it up for auction. By then the Lewenstein couple had died and their two children had fled Europe.

The German government panel concluded that “there are numerous indications that this was a case of seizure as a result of Nazi persecution.” It said that art losses experienced by Jewish collectors after the German invasion on May 10, 1940, should be presumed involuntary unless there was clear evidence to the contrary.

“This fundamental reversal of the burden of proof in favor of the former owners reflects the pressure exerted on those persecuted by the Nazi regime,” it said, adding that “the systematic exclusion, disenfranchisement and dispossession of the Jewish population of the Netherlands began immediately after the invasion.”

In recent years the Lewenstein heirs recovered another Kandinsky painting lost under the same unclear circumstances and sold at the same 1940 auction. The return of that work, “Painting With Houses,” concluded a long and heated dispute between the heirs and the city of Amsterdam.

This article originally appeared in The New York Times.